EX-99.1 2 exhibit991lionqe93018press.htm EXHIBIT 99.1 Exhibit



fidelitysouthernq2diva06.jpg
FOR IMMEDIATE RELEASE

Contacts: Martha Fleming, Charles D. Christy
Fidelity Southern Corporation (404) 240-1504

FIDELITY SOUTHERN CORPORATION REPORTS EARNINGS
FOR THIRD QUARTER OF $12.7 MILLION
ATLANTA, GA (October 18, 2018) – Fidelity Southern Corporation (“Fidelity” or the “Company”) (NASDAQ: LION), holding company for Fidelity Bank (the “Bank”), today reported net income of $12.7 million, or $0.47 per diluted share, for the third quarter of 2018, compared with $9.4 million, or $0.34 per diluted share, for the second quarter of 2018, and with $7.9 million or $0.30 per diluted share for the third quarter of 2017. For the year to date ended September 30, 2018, the Company reported net income of $33.9 million, or $1.25 per diluted share, compared with $27.4 million, or $1.03 per diluted share, for the same period in 2017.

Fidelity’s Chairman, Jim Miller, said, “The third quarter reflects a number of positive trends with our decision to reduce our indirect auto business. Transitioning to a more commercially focused balance sheet has allowed us to build more customer relationships, help continue our good deposit growth, provide net interest margin growth, and moderate our costs as the banking industry and markets continue to change.”

President Palmer Proctor added, “The momentum we started last year has successfully generated over $328 million, or 9%, total loan growth since the end of the third quarter of 2017. This is in spite of very competitive market conditions and accelerated payoffs. We are fully focused on driving shareholder value through our balance sheet transition strategy that will enhance liquidity, drive more commercial bank growth, increase our bond portfolio, and allow us to be more efficient in the back office.”

BALANCE SHEET
Total assets decreased by $80.3 million, or 1.6%, during the quarter, to $4.8 billion at September 30, 2018, primarily due to a decrease of $159.3 million in total loans. This decrease was driven by a decrease of $110.5 million in indirect auto loans as Fidelity exited all markets, except for Florida and Georgia, at the end of last quarter. Servicing rights also decreased by $8.7 million, primarily due to the previously announced $1.2 billion sale of mortgage servicing rights ("MSRs") during the quarter.
Offsetting these decreases, investments increased by $60.4 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, and reduce its reliance on "gain on sale" income. Cash balances also increased by $25.1 million for the quarter.

1





Loans
Total loans, including loans held for sale, decreased during the quarter by $159.3 million, or 3.8%, to $4.1 billion at September 30, 2018. This decrease was driven by a reduction of $110.5 million in indirect loans through normal attrition and $18.6 million in loan sales. As planned, production of indirect auto loans decreased by $96.9 million compared to the previous quarter.
Asset Quality
Asset quality remained strong as nonperforming assets, excluding the guaranteed portion of government loans (“adjusted NPA’s”) and acquired loans, decreased during the quarter. Adjusted NPA’s, a non-GAAP measure, decreased by $3.3 million during the quarter. The decrease was mainly due to the decrease in nonaccrual loans. Credit quality trend performance remains consistent and strong as net charge-offs decreased from 0.17% to 0.09% of average loans for the quarter. Lower charge-offs helped drive the $1.9 million decrease in the provision for loan losses for the quarter.
Fair Value Adjustments
Loan servicing rights decreased by $8.7 million, or 6.9%, during the quarter to $117.0 million at September 30, 2018, compared to $125.7 million at June 30, 2018. MSRs, the primary component of loan servicing rights, contributed the majority of the change, decreasing by 6.9% to $106.9 million at September 30, 2018, primarily due to the sale of MSRs noted above. The current estimated fair market value of MSRs was $111.6 million at September 30, 2018.
At September 30, 2018, fair value adjustments recorded on the balance sheet for loans held for sale, interest rate lock commitments ("IRLCs"), and hedge items were $11.8 million, a $3.0 million, or 20.1% decrease, from June 30, 2018. The gross pipeline of interest rate lock commitments was $65.7 million lower at quarter end, compared to June 30, 2018, due to slower seasonal production.
Deposits
Core deposits grew by $17.7 million during the quarter to $3.1 billion with noninterest bearing demand deposits contributing to nearly all of this growth. Noninterest bearing deposits grew by 1.4% as interest bearing demand, money market, and savings accounts remained flat. This increase was offset by a decrease in time deposits of $37.4 million during the quarter, mainly due to a decrease of $30.6 million in brokered deposits, resulting in a decrease in total deposits of $19.7 million, or 0.5%.
INCOME STATEMENT
Net Income
Net income was $12.7 million, or a $3.4 million increase over the previous quarter, as net interest income increased by $2.3 million and noninterest expense decreased by $3.3 million, primarily due to a $1.7 million decrease in commissions as a 17.7% decrease in mortgage loan production during the quarter drove lower mortgage commissions. A decrease of $1.9 million in the provision for loan losses also contributed to the increase in net income. Offsetting these changes was a decrease in noninterest income of $3.3 million, primarily due to a $5.9 million decrease in mortgage banking income, offset by a $2.8 million increase in other operating income mainly due to a $2.6 million death benefit received from cash surrender value life insurance policies during the quarter.
Net income was $4.8 million higher compared to the same quarter a year ago, primarily due to an increase in net interest income of $5.4 million.

2




Interest Income
Interest income of $46.9 million was higher by $2.1 million, compared to the prior quarter, primarily driven by an increase of 25 basis points in the yield on total loans. Interest income on loans for the quarter included a $1.1 million interest recovery from one nonaccrual commercial loan, which contributed 11 basis points to this increase. Although average loans decreased by $111.7 million for the quarter, $98.7 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 $26.4 million also contributed to higher interest income. The yield on total average interest-bearing assets increased 23 basis points from the previous quarter.
As compared to the same period in the prior year, interest income increased by $7.8 million as average loans increased by $384.6 million and the yield on total average interest-bearing assets increased by 43 basis points, as market interest rates increased year over year.
Interest Expense
Interest expense of $8.1 million decreased slightly by $143,000, or 1.7%, for the quarter as average FHLB borrowings decreased by $226.1 million.
As compared to the same period in the prior year, interest expense increased by $2.4 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.
Net Interest Margin
The net interest margin was 3.45% for the quarter compared to 3.22% in the previous quarter, an increase of 23 basis points. Adjusting the net interest margin for the $1.1 million interest recovery, the net interest margin percentage was 3.36% for the quarter. 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 interest-bearing liabilities increased by only 2 basis points while the yield on average earning assets increased by 23 basis points from 3.95% to 4.18%. The previously mentioned interest recovery of $1.1 million contributed 11 basis points to this increase. Average loans decreased by $111.7 million, of which $98.7 million was a decrease in lower yielding indirect auto loans. Higher yielding commercial and SBA loans increased by $40.8 million as the Bank's strategy to reposition its balance sheet continues to occur.
Average interest-bearing liabilities decreased by $172.9 million, as average borrowings decreased by $226.1 million during the quarter since average deposit growth of $53.2 million helped to fund loan production.
As compared to the same period a year ago, the net interest margin for the quarter increased by 25 basis points to 3.45% from 3.20%, primarily due to a 43 basis point increase in the yield on total average interest-earning assets of $4.5 billion, offset by an increase of 27 basis points in the yield on total average interest-bearing liabilities of $3.1 billion. Average earning assets increased by $307.0 million, primarily due to an increase in average loans over the year. Average interest-bearing liabilities increased by $136.1 million, primarily driven by an increase in average borrowings of $148.2 million, offset by a decrease in average interest-bearing deposits of $12.3 million.
Noninterest Income
On a linked-quarter basis, noninterest income decreased by $3.3 million, or 9.0%, largely due to a net decrease in income from mortgage banking activities of $5.9 million, or 20.0%. Gross mortgage revenue decreased by $4.5 million and the mortgage MSR valuation impairment resulted in a decrease in related income of $1.3 million. Mortgage production also decreased during the quarter by $160.7 million. Offsetting this decrease, other noninterest income increased by $2.8 million, primarily due to the $2.6 million death benefit received from life insurance policies during the quarter.
Compared to the same period a year ago, noninterest income for the quarter of $33.7 million was flat.

3




Noninterest Expense
On a linked-quarter basis, total noninterest expense decreased by $3.3 million, or 5.6%, due to a decrease in commissions expense of $1.7 million from lower mortgage loan originations and a net decrease in all other noninterest expenses of $1.5 million. These were primarily due to projects related to debit card and ATM fraud loss, outside service fees, utilities, and other liabilities, offset by increased incentives related to the balance sheet strategies implemented earlier in the year.
Compared to the second quarter of 2017, noninterest expense of $55.6 million increased by $2.7 million, or 5.2%. Salaries and employee benefits expense increased by $2.5 million, or 9.4%, due primarily to an increase in headcount of 63 in the mortgage and retail delivery and branches.
Income Taxes
On a linked-quarter basis, income tax expense increased by $801,000, primarily due to the increase in pre-tax income for the quarter.
Compared to the third quarter of 2017, income tax expense decreased by $1.1 million as the effective tax rate decreased from 37.9% to 22.6% 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.
OTHER NEWS
On August 30, 2018, the Bank sold MSRs relating to certain single family mortgage loans serviced for the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), with an aggregate unpaid principal balance of approximately $1.2 billion, effective as of August 31, 2018 (“Sale Date”). Approximately $13.9 million in deposit balances representing custodial funds and advances related to the MSRs were transferred to the buyer by the Bank after the Sale Date. The sale represented approximately 12% of the Bank’s total single family mortgage servicing portfolio as of August 31, 2018.
This was the first sale of MSRs executed by the Bank as part of the Company’s capital management strategy. The Bank anticipates executing other MSRs sales from time to time in the future as part of its ordinary course of business.
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

4




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. Additional information and other factors that could affect future financial 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
 
 
As of or for the Nine Months Ended
($ in thousands, except per share data)
September 30,
2018
 
June 30,
2018
 
September 30,
2017
 
 
September 30,
2018
 
September 30,
2017
INCOME STATEMENT DATA:
 
 
 
 
 
 
 
 
 
 
Interest income
$
46,872

 
$
44,740

 
$
39,105

 
 
$
133,174

 
$
116,325

Interest expense
8,125

 
8,268

 
5,711

 
 
23,187

 
16,951

Net interest income
38,747

 
36,472

 
33,394

 
 
109,987

 
99,374

Provision for loan losses
360

 
2,286

 
1,425

 
 
4,776

 
4,275

Noninterest income
33,662

 
36,977

 
33,638

 
 
107,772

 
106,064

Noninterest expense
55,585

 
58,852

 
52,837

 
 
169,179

 
157,960

Net income before income taxes
16,464

 
12,311

 
12,770

 
 
43,804

 
43,203

Income tax expense
3,722

 
2,921

 
4,836

 
 
9,905

 
15,850

Net income
12,742

 
9,390

 
7,934

 
 
33,899

 
27,353

PERFORMANCE:
 
 
 
 
 
 
 
 
 
 
Earnings per common share - basic
$
0.47

 
$
0.35

 
$
0.30

 
 
$
1.25

 
$
1.03

Earnings per common share - diluted
0.47

 
0.34

 
0.30

 
 
1.25

 
1.03

Total revenues
72,409

 
73,449

 
67,032

 
 
217,759

 
205,438

Book value per common share
15.85

 
15.48

 
14.47

 
 
15.85

 
14.47

Tangible book value per common share(1)
15.43

 
15.05

 
14.00

 
 
15.43

 
14.00

Cash dividends paid per common share
0.12

 
0.12

 
0.12

 
 
0.36

 
0.36

Dividend payout ratio
25.53
%
 
34.29
%
 
40.00
%
 
 
28.80
%
 
34.95
%
Return on average assets
1.05
%
 
0.77
%
 
0.70
%
 
 
0.95
%
 
0.81
%
Return on average shareholders equity
11.87
%
 
9.06
%
 
8.28
%
 
 
10.92
%
 
9.66
%
Equity to assets ratio
8.98
%
 
8.60
%
 
8.61
%
 
 
8.98
%
 
8.61
%
Net interest margin
3.45
%
 
3.22
%
 
3.20
%
 
 
3.32
%
 
3.20
%
END OF PERIOD BALANCE SHEET SUMMARY:
 
 
 
 
 
 
 
 
 
 
Total assets
$
4,812,056

 
$
4,892,369

 
$
4,505,423

 
 
$
4,812,056

 
$
4,505,423

Earning assets
4,448,875

 
4,549,315

 
4,167,549

 
 
4,448,875

 
4,167,549

Loans, excluding loans held-for-sale
3,706,953

 
3,792,886

 
3,409,707

 
 
3,706,953

 
3,409,707

Total loans
4,078,272

 
4,237,572

 
3,750,036

 
 
4,078,272

 
3,750,036

Total deposits
4,049,969

 
4,069,630

 
3,938,360

 
 
4,049,969

 
3,938,360

Shareholders equity
432,098

 
420,962

 
388,068

 
 
432,098

 
388,068

Assets serviced for others(2)
10,882,832

 
10,632,607

 
10,109,466

 
 
10,882,832

 
10,109,466

ASSET QUALITY RATIOS:
 
 
 
 
 
 
 
 
 
 
Net charge-offs to average loans
0.09
%
 
0.17
%
 
0.13
%
 
 
0.12
%
 
0.13
%
Allowance to period-end loans
0.84
%
 
0.83
%
 
0.90
%
 
 
0.84
%
 
0.90
%
Adjusted allowance to adjusted period end loans(1)
1.14
%
 
1.16
%
 
1.29
%
 
 
1.14
%
 
1.29
%
Nonperforming assets to total loans, ORE and repossessions
1.92
%
 
1.96
%
 
1.71
%
 
 
1.92
%
 
1.71
%
Adjusted nonperforming assets to loans, ORE and repossessions(3)
0.92
%
 
0.99
%
 
1.05
%
 
 
0.92
%
 
1.05
%
Allowance to nonperforming loans, ORE and repossessions
0.44x

 
0.42x

 
0.52x

 
 
0.44x

 
0.52x

SELECTED RATIOS:
 
 
 
 
 
 
 
 
 
 
Loans to total deposits
91.53
%
 
93.20
%
 
86.58
%
 
 
91.53
%
 
86.58
%
Average total loans to average earning assets
92.29
%
 
92.90
%
 
89.85
%
 
 
92.63
%
 
89.61
%
Noninterest income to total revenue
46.49
%
 
50.34
%
 
50.18
%
 
 
49.49
%
 
51.63
%
Leverage ratio
8.96
%
 
8.43
%
 
8.81
%
 
 
8.96
%
 
8.81
%
Common equity tier 1 capital
9.15
%
 
8.45
%
 
8.81
%
 
 
9.15
%
 
8.81
%
Tier 1 risk-based capital
10.24
%
 
9.50
%
 
9.96
%
 
 
10.24
%
 
9.96
%
Total risk-based capital
12.78
%
 
11.99
%
 
12.68
%
 
 
12.78
%
 
12.68
%
Mortgage loan production
$
748,044

 
$
908,754

 
$
752,854

 
 
$
2,270,112

 
$
2,106,277

Total mortgage loan sales
771,058

 
800,084

 
731,595

 
 
2,067,626

 
1,986,671

Indirect automobile production
86,801

 
183,675

 
256,084

 
 
529,036

 
822,341

Total indirect automobile sales
18,614

 
29,275

 
27,115

 
 
133,889

 
371,546

 
 
 
 
 
 
 
 
 
 
 
(1)   Non-GAAP financial measure. See non-GAAP reconciliation table for the comparable GAAP.
(2)  Balances for September 30, 2018 include approximately $1.2 billion of sub-serviced loans as a result of the August 31, 2018 MSRs sale. Servicing on these loans transferred to the Purchaser on 10/1/18 and 10/16/18.
(3)  Excludes acquired loans and net of government guarantees. See non-GAAP reconciliation table for the comparable GAAP.

6




FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
($ in thousands)
 
September 30,
2018
 
June 30,
2018
 
September 30,
2017
ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 
$
182,672

 
$
157,586

 
$
312,027

Investment securities available-for-sale
 
209,180

 
148,155

 
124,827

Investment securities held-to-maturity
 
20,383

 
20,984

 
15,072

Loans held-for-sale
 
371,319

 
444,686

 
340,329

 
 
 
 
 
 
 
Loans
 
3,706,953

 
3,792,886

 
3,409,707

Allowance for loan losses
 
(31,157
)
 
(31,623
)
 
(30,703
)
Loans, net of allowance for loan losses
 
3,675,796

 
3,761,263

 
3,379,004

 
 
 
 
 
 
 
Premises and equipment, net
 
91,359

 
90,246

 
87,792

Other real estate, net
 
8,031

 
6,834

 
8,624

Bank owned life insurance
 
71,092

 
72,703

 
71,455

Servicing rights, net
 
116,982

 
125,704

 
111,890

Other assets
 
65,242

 
64,208

 
54,403

Total assets
 
$
4,812,056

 
$
4,892,369

 
$
4,505,423

 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
$
1,249,391

 
$
1,232,650

 
$
1,112,714

Interest-bearing deposits
 
 
 
 
 
 
Demand deposits
 
477,477

 
491,307

 
464,780

Money market and savings deposits
 
1,413,960

 
1,399,160

 
1,371,233

Time deposits
 
909,141

 
946,513

 
989,633

Total deposits
 
4,049,969

 
4,069,630

 
3,938,360

 
 
 
 
 
 
 
Short-term borrowings
 
163,562

 
237,886

 
14,746

Subordinated debt, net
 
120,680

 
120,653

 
120,554

Other liabilities
 
45,747

 
43,238

 
43,695

Total liabilities
 
4,379,958

 
4,471,407

 
4,117,355

 
 
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
 
 
 
Common stock
 
226,605

 
223,771

 
212,633

Accumulated other comprehensive (loss) income, net
 
(2,270
)
 
(1,096
)
 
964

Retained earnings
 
207,763

 
198,287

 
174,471

Total shareholders’ equity
 
432,098

 
420,962

 
388,068

Total liabilities and shareholders’ equity
 
$
4,812,056

 
$
4,892,369

 
$
4,505,423



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FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
 
For the Quarter Ended
 
 
For the Nine Months Ended
($ in thousands, except per share data)
 
September 30,
2018
 
June 30,
2018
 
September 30,
2017
 
 
September 30,
2018
 
September 30,
2017
INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
Loans, including fees
 
$
44,746

 
$
42,845

 
$
37,290

 
 
$
127,440

 
$
110,933

Investment securities
 
1,646

 
1,354

 
1,011

 
 
4,175

 
3,389

Other
 
480

 
541

 
804

 
 
1,559

 
2,003

Total interest income
 
46,872

 
44,740

 
39,105

 
 
133,174

 
116,325

INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
Deposits
 
5,655

 
4,823

 
4,163

 
 
14,791

 
11,503

Other borrowings
 
818

 
1,812

 
16

 
 
3,540

 
910

Subordinated debt
 
1,652

 
1,633

 
1,532

 
 
4,856

 
4,538

Total interest expense
 
8,125

 
8,268

 
5,711

 
 
23,187

 
16,951

Net interest income
 
38,747

 
36,472

 
33,394

 
 
109,987

 
99,374

Provision for loan losses
 
360

 
2,286

 
1,425

 
 
4,776

 
4,275

Net interest income after provision for loan losses
 
38,387

 
34,186

 
31,969

 
 
105,211

 
95,099

NONINTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
 
1,690

 
1,468

 
1,553

 
 
4,630

 
4,489

Other fees and charges
 
2,464

 
2,449

 
2,197

 
 
7,148

 
6,060

Mortgage banking activities
 
23,520

 
29,383

 
25,040

 
 
81,465

 
77,865

Indirect lending activities
 
1,120

 
1,270

 
1,901

 
 
4,538

 
9,967

SBA lending activities
 
914

 
1,217

 
1,460

 
 
3,288

 
3,959

Trust and wealth management services
 
588

 
574

 
325

 
 
1,694

 
853

Other
 
3,366

 
616

 
1,162

 
 
5,009

 
2,871

Total noninterest income
 
33,662

 
36,977

 
33,638

 
 
107,772

 
106,064

NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
28,805

 
28,215

 
26,331

 
 
84,581

 
77,621

Commissions
 
9,523

 
11,242

 
9,244

 
 
28,271

 
26,126

Occupancy and equipment
 
4,654

 
4,541

 
4,508

 
 
14,127

 
13,371

Professional and other services
 
4,243

 
4,635

 
4,604

 
 
13,676

 
13,723

Other
 
8,360

 
10,219

 
8,150

 
 
28,524

 
27,119

Total noninterest expense
 
55,585

 
58,852

 
52,837

 
 
169,179

 
157,960

Income before income tax expense
 
16,464

 
12,311

 
12,770

 
 
43,804

 
43,203

Income tax expense
 
3,722

 
2,921

 
4,836

 
 
9,905

 
15,850

NET INCOME
 
$
12,742

 
$
9,390

 
$
7,934

 
 
$
33,899

 
$
27,353

 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.47

 
$
0.35

 
$
0.30

 
 
$
1.25

 
$
1.03

Diluted
 
$
0.47

 
$
0.34

 
$
0.30

 
 
$
1.25

 
$
1.03

Weighted average common shares outstanding-basic
 
27,229

 
27,093

 
26,729

 
 
27,112

 
26,500

Weighted average common shares outstanding-diluted
 
27,337

 
27,222

 
26,849

 
 
27,223

 
26,625



8




FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
LOANS BY CATEGORY
(UNAUDITED)
($ in thousands)
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Commercial
 
$
940,430

 
$
938,203

 
$
897,297

 
$
811,199

 
$
789,788

SBA
 
163,147

 
146,508

 
140,308

 
141,208

 
142,989

Total commercial and SBA loans
 
1,103,577

 
1,084,711

 
1,037,605

 
952,407

 
932,777

 
 
 
 
 
 
 
 
 
 
 
Construction loans
 
262,048

 
269,330

 
265,780

 
248,317

 
243,600

 
 
 
 
 
 
 
 
 
 
 
Indirect automobile
 
1,588,419

 
1,698,879

 
1,719,670

 
1,716,156

 
1,609,678

Installment loans and personal lines of credit
 
29,260

 
31,807

 
28,716

 
25,995

 
26,189

Total consumer loans
 
1,617,679

 
1,730,686

 
1,748,386

 
1,742,151

 
1,635,867

Residential mortgage
 
571,081

 
555,636

 
512,673

 
489,721

 
452,584

Home equity lines of credit
 
152,568

 
152,523

 
149,864

 
148,370

 
144,879

Total mortgage loans
 
723,649

 
708,159

 
662,537

 
638,091

 
597,463

Loans
 
3,706,953

 
3,792,886

 
3,714,308

 
3,580,966

 
3,409,707

 
 
 
 
 
 
 
 
 
 
 
Loans held-for-sale:
 
 
 
 
 
 
 
 
 
 
Residential mortgage
 
328,090

 
399,630

 
355,515

 
269,140

 
257,325

SBA
 
18,229

 
20,056

 
19,785

 
13,615

 
8,004

Indirect automobile
 
25,000

 
25,000

 
50,000

 
75,000

 
75,000

Total loans held-for-sale
 
371,319

 
444,686

 
425,300

 
357,755

 
340,329

Total loans
 
$
4,078,272

 
$
4,237,572

 
$
4,139,608

 
$
3,938,721

 
$
3,750,036

 
 
 
 
 
 
 
 
 
 
 

DEPOSITS BY CATEGORY
(UNAUDITED)
 
For the Quarter Ended
 
September 30, 2018
 
June 30, 2018
 
March 31, 2018
 
December 31, 2017
 
September 30, 2017
($ in thousands)
Average Amount
 
Rate
 
Average Amount
 
Rate
 
Average Amount
 
Rate
 
Average Amount
 
Rate
 
Average Amount
 
Rate
Noninterest-bearing demand deposits
$
1,244,640

 
%
 
$
1,172,298

 
%
 
$
1,120,562

 
%
 
$
1,124,759

 
%
 
$
1,103,414

 
%
Interest-bearing demand deposits
463,292

 
0.13
%
 
489,051

 
0.14
%
 
461,614

 
0.14
%
 
453,714

 
0.11
%
 
447,348

 
0.12
%
Money market and savings deposits
1,415,868

 
0.70
%
 
1,349,447

 
0.61
%
 
1,345,905

 
0.55
%
 
1,381,207

 
0.53
%
 
1,341,189

 
0.49
%
Time deposits
918,668

 
1.30
%
 
906,133

 
1.16
%
 
901,394

 
1.04
%
 
958,790

 
0.94
%
 
1,021,563

 
0.92
%
Total average deposits
$
4,042,468

 
0.55
%
 
$
3,916,929

 
0.49
%
 
$
3,829,475

 
0.46
%
 
$
3,918,470

 
0.43
%
 
$
3,913,514

 
0.42
%


9




FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
NONPERFORMING AND CLASSIFIED ASSETS
(UNAUDITED)
($ in thousands)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
NONPERFORMING ASSETS
 
 
 
 
 
 
 
 
 
Nonaccrual loans (2)(6)
$
53,173

 
$
58,027

 
$
58,706

 
$
47,012

 
$
41,408

Loans past due 90 days or more and still accruing
8,858

 
8,278

 
7,728

 
6,313

 
6,534

Repossessions
1,271

 
1,303

 
1,853

 
2,392

 
2,040

Other real estate (ORE)
8,031

 
6,834

 
7,668

 
7,621

 
8,624

Nonperforming assets
$
71,333

 
$
74,442

 
$
75,955

 
$
63,338

 
$
58,606

 
 
 
 
 
 
 
 
 
 
ASSET QUALITY RATIOS
 
 
 
 
 
 
 
 
 
Loans 30-89 days past due
$
6,858

 
$
6,514

 
$
15,695

 
$
22,079

 
$
10,193

Loans 30-89 days past due to loans
0.19
%
 
0.17
%
 
0.42
%
 
0.62
%
 
0.30
%
Loans past due 90 days or more and still accruing to loans
0.24
%
 
0.22
%
 
0.21
%
 
0.18
%
 
0.19
%
Nonperforming loans as a % of loans
1.67
%
 
1.75
%
 
1.79
%
 
1.49
%
 
1.41
%
Nonperforming assets to loans, ORE, and repossessions
1.92
%
 
1.96
%
 
2.04
%
 
1.76
%
 
1.71
%
Adjusted nonperforming assets to adjusted loans, ORE and repossessions(8)
0.92
%
 
0.99
%
 
1.14
%
 
1.06
%
 
1.05
%
Nonperforming assets to total assets
1.48
%
 
1.52
%
 
1.58
%
 
1.38
%
 
1.30
%
Adjusted nonperforming assets to total assets(8)
0.68
%
 
0.73
%
 
0.84
%
 
0.79
%
 
0.75
%
Classified Asset Ratio(4)
19.60
%
 
21.84
%
 
21.70
%
 
20.70
%
 
20.59
%
ALL to nonperforming loans
50.23
%
 
47.69
%
 
46.57
%
 
55.83
%
 
64.04
%
Net charge-offs, annualized to average loans
0.09
%
 
0.17
%
 
0.11
%
 
0.11
%
 
0.13
%
ALL as a % of loans
0.84
%
 
0.83
%
 
0.83
%
 
0.83
%
 
0.90
%
Adjusted ALL as a % of adjusted loans(7)
1.14
%
 
1.16
%
 
1.15
%
 
1.16
%
 
1.29
%
ALL as a % of loans, excluding acquired loans(5)
0.88
%
 
0.87
%
 
0.88
%
 
0.88
%
 
0.96
%
 
 
 
 
 
 
 
 
 
 
CLASSIFIED ASSETS
 
 
 
 
 
 
 
 
 
Classified loans(1)
$
80,176

 
$
87,688

 
$
83,867

 
$
77,679

 
$
75,033

ORE and repossessions
9,302

 
8,137

 
9,521

 
10,013

 
10,664

Total classified assets(3)
$
89,478

 
$
95,825

 
$
93,388

 
$
87,692

 
$
85,697

 
 
 
 
 
 
 
 
 
 
(1) Amount of SBA guarantee included in classified loans
$
5,254

 
$
4,870

 
$
2,879

 
$
2,930

 
$
2,755

(2) Amount of repurchased government-guaranteed loans, primarily residential mortgage loans, included in nonaccrual loans
$
27,218

 
$
27,220

 
$
26,091

 
$
19,478

 
$
15,450

(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

10




FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
INCOME FROM INDIRECT LENDING ACTIVITIES
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Quarter Ended
(in thousands)
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Loan servicing revenue
 
$
1,581

 
$
1,690

 
$
1,769

 
$
2,158

 
$
2,130

Gain on sale of loans
 
53

 
22

 
442

 
532

 
263

Gain on capitalization of servicing rights
 
124

 
196

 
569

 
406

 
182

Ancillary loan servicing revenue
 
162

 
166

 
183

 
247

 
172

    Gross indirect lending revenue
 
1,920

 
2,074

 
2,963

 
3,343

 
2,747

Less:
 
 
 
 
 
 
 
 
 
 
Amortization of servicing rights, net
 
(800
)
 
(804
)
 
(815
)
 
(777
)
 
(846
)
Total income from indirect lending activities
 
$
1,120

 
$
1,270

 
$
2,148

 
$
2,566

 
$
1,901


FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
ANALYSIS OF INDIRECT LENDING
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of or for the Quarter Ended
($ in thousands)
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Average loans outstanding(1)
 
$
1,673,014

 
$
1,771,665

 
$
1,784,982

 
$
1,748,179

 
$
1,627,946

Loans serviced for others
 
$
838,574

 
$
932,915

 
$
1,018,743

 
$
1,056,509

 
$
1,114,710

Past due loans:
 
 
 
 
 
 
 
 
 
 
 
Amount 30+ days past due
 
2,659

 
2,407

 
2,257

 
3,423

 
2,965

 
Number 30+ days past due
 
258

 
217

 
197

 
283

 
255

30+ day performing delinquency rate(2)
 
0.16
%
 
0.14
%
 
0.13
%
 
0.19
%
 
0.18
%
Nonperforming loans
 
1,490

 
1,526

 
1,539

 
1,916

 
1,405

Nonperforming loans as a percentage of period end loans(2)
 
0.09
%
 
0.09
%
 
0.09
%
 
0.11
%
 
0.08
%
Net charge-offs
 
$
1,069

 
$
864

 
$
1,147

 
$
798

 
$
1,047

Net charge-off rate(3)
 
0.26
%
 
0.20
%
 
0.27
%
 
0.19
%
 
0.27
%
Number of vehicles repossessed during the period
 
139

 
132

 
140

 
107

 
132

Quarterly production weighted average beacon score
 
769

 
779

 
781

 
783

 
776

 
 
(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
ANALYSIS OF INDIRECT LENDING
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of or for the Quarter Ended
($ in thousands)
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Production by state:
 
 
 
 
 
 
 
 
 
 
 
Alabama (3)
 
$
50

 
$
9,920

 
$
12,239

 
$
19,216

 
$
13,587

 
Arkansas (3)
 

 
4,488

 
20,322

 
30,732

 
26,997

 
North Carolina (3)
 
97

 
15,580

 
23,383

 
28,912

 
16,545

 
South Carolina (3)
 

 
11,065

 
12,322

 
16,559

 
10,959

 
Florida
 
51,620

 
52,645

 
65,786

 
87,750

 
51,723

 
Georgia
 
35,034

 
38,322

 
38,288

 
45,571

 
31,266

 
Mississippi (3)
 

 
22,605

 
24,785

 
32,141

 
24,535

 
Tennessee (3)
 

 
11,098

 
13,509

 
17,635

 
10,931

 
Virginia (3)
 

 

 
3,620

 
6,495

 
8,223

 
Texas (2)
 

 

 

 

 
13,312

 
Louisiana (3)
 

 
17,952

 
44,306

 
60,021

 
47,576

 
Oklahoma (2)
 

 

 

 

 
430

 
 
Total production by state
 
$
86,801

 
$
183,675

 
$
258,560

 
$
345,032

 
$
256,084

 
 
 
 
 
 
 
 
 
 
 
 
 
Loan sales
 
$
18,614

 
$
29,275

 
$
86,000

 
$
59,681

 
$
27,115

Portfolio yield (1)
 
3.08
%
 
3.02
%
 
2.98
%
 
2.98
%
 
2.92
%
 
 
(1) 
Includes held-for-sale
(2) 
Fidelity exited the Oklahoma and Texas markets in Q3 2017
(3) 
Fidelity exited the Alabama, Arkansas, North Carolina, South Carolina, Mississippi, Tennessee, Virginia, and Louisiana markets in 2018

12




FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
INCOME FROM MORTGAGE BANKING ACTIVITIES
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of or for the Quarter Ended
(in thousands)
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Marketing gain, net
 
$
16,427

 
$
20,330

 
$
17,575

 
$
16,683

 
$
19,713

Origination points and fees
 
4,707

 
5,495

 
3,647

 
3,482

 
3,815

Loan servicing revenue
 
6,360

 
6,206

 
6,221

 
5,851

 
5,616

Gross mortgage revenue
 
$
27,494

 
$
32,031

 
$
27,443

 
$
26,016

 
$
29,144

Less:
 
 
 
 
 
 
 
 
 
 
MSR amortization
 
(3,369
)
 
(3,331
)
 
(3,426
)
 
(3,609
)
 
(3,560
)
MSR recovery/(impairment), net
 
(605
)
 
683

 
4,545

 
(1,476
)
 
(544
)
Total income from mortgage banking activities
 
$
23,520

 
$
29,383

 
$
28,562

 
$
20,931

 
$
25,040

 
 
 
 
 
 
 
 
 
 
 
 
 
FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
ANALYSIS OF MORTGAGE LENDING
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of or for the Quarter Ended
($ in thousands)
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Production by region:
 
 
 
 
 
 
 
 
 
 
 
Georgia
 
$
436,889

 
$
545,951

 
$
368,739

 
$
423,876

 
$
490,323

 
Florida
 
120,230

 
136,990

 
109,034

 
103,490

 
95,010

 
Alabama/Tennessee
 
748

 
2,433

 
2,709

 
4,609

 
7,299

 
Virginia/Maryland
 
130,728

 
148,970

 
91,842

 
106,398

 
129,774

 
North and South Carolina
 
59,449

 
74,410

 
40,990

 
31,360

 
30,448

 
Total production by region
 
$
748,044

 
$
908,754

 
$
613,314

 
$
669,733

 
$
752,854

 
 
 
 
 
 
 
 
 
 
 
 
% for purchases
 
90.6
%
 
91.6
%
 
85.1
%
 
82.9
%
 
86.3
%
 
% for refinance loans
 
9.4
%
 
8.4
%
 
14.9
%
 
17.1
%
 
13.7
%
 
 
 
 
 
 
 
 
 
 
 
Portfolio Production:
 
$
56,108

 
$
75,990

 
$
44,554

 
$
66,236

 
$
56,072

 
 
 
 
 
 
 
 
 
 
 
Funded loan type (UPB):
 
 
 
 
 
 
 
 
 
 
 
Conventional
 
64.3
%
 
63.8
%
 
65.9
%
 
62.0
%
 
62.0
%
 
FHA/VA/USDA
 
21.5
%
 
20.7
%
 
22.1
%
 
21.5
%
 
23.3
%
 
Jumbo
 
14.2
%
 
15.5
%
 
12.0
%
 
16.5
%
 
14.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross pipeline of locked loans to be sold (UPB)
 
$
289,065

 
$
354,735

 
$
382,386

 
$
203,896

 
$
265,444

Loans held for sale (UPB)
 
$
322,722

 
$
389,858

 
$
348,797

 
$
262,315

 
$
250,960

 
 
 
 
 
 
 
 
 
 
 
 
 
Total loan sales (UPB)
 
$
771,058

 
$
800,084

 
$
496,484

 
$
602,171

 
$
731,595

 
Conventional
 
66.6
%
 
70.7
%
 
69.1
%
 
64.3
%
 
63.0
%
 
FHA/VA/USDA
 
24.5
%
 
21.3
%
 
27.2
%
 
25.0
%
 
27.1
%
 
Jumbo
 
8.9
%
 
8.0
%
 
3.7
%
 
10.7
%
 
9.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Average loans outstanding(1)
 
$
877,890

 
$
913,430

 
$
725,444

 
$
701,932

 
$
698,068

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes held-for-sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

13




FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
THIRD PARTY MORTGAGE LOAN SERVICING
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of or for the Quarter Ended
($ in thousands)
 
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
Loans serviced for others (UPB)(1)
 
$
8,687,984

 
$
9,450,326

 
$
9,097,869

 
$
8,917,117

 
$
8,715,198

Average loans serviced for others (UPB)(1)
 
$
9,279,843

 
$
9,244,175

 
$
9,038,568

 
$
8,896,305

 
$
8,657,475

 
 
 
 
 
 
 
 
 
 
 
MSR book value, net of amortization
 
$
108,876

 
$
119,372

 
$
113,217

 
$
110,497

 
$
107,434

MSR impairment
 
(2,000
)
 
(4,590
)
 
(5,274
)
 
(9,818
)
 
(8,343
)
MSR net carrying value
 
$
106,876

 
$
114,782

 
$
107,943

 
$
100,679

 
$
99,091

 
 
 
 
 
 
 
 
 
 
 
MSR carrying value as a % of period end UPB
 
1.23
%
 
1.21
%
 
1.19
%
 
1.13
%
 
1.14
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Delinquency % loans serviced for others
 
1.28
%
 
1.28
%
 
1.24
%
 
1.87
%
 
1.41
%
 
 
 
 
 
 
 
 
 
 
 
 
 
MSR revenue multiple(2)
 
4.49

 
4.52

 
4.31

 
4.29

 
4.38

(1) Balances for September 30, 2018 exclude the UPB of loans temporarily sub-serviced as a result of the August 31, 2018 MSRs sale. Servicing transferred to the Purchaser on 10/1/18 and 10/16/18.
(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.


14




FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE AND YIELDS
(UNAUDITED)
 
For the Quarter Ended
 
September 30, 2018
 
June 30, 2018
 
September 30, 2017
 
Average
 
Yield/
 
Average
 
Yield/
 
Average
 
Yield/
($ in thousands)
Balance
 
Rate
 
Balance
 
Rate
 
Balance
 
Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
  Commercial
$
949,747

 
5.27
%
 
$
920,995

 
4.71
%
 
$
802,318

 
4.65
%
  SBA
166,467

 
8.07
%
 
154,459

 
7.16
%
 
150,733

 
7.81
%
  Construction
255,302

 
6.61
%
 
267,125

 
6.51
%
 
238,437

 
6.51
%
  Indirect automobile
1,673,014

 
3.08
%
 
1,771,665

 
3.02
%
 
1,645,641

 
2.92
%
  Installment loans and personal lines of credit
36,764

 
3.55
%
 
44,033

 
2.69
%
 
39,477

 
3.55
%
  Residential mortgage
877,080

 
4.14
%
 
912,700

 
4.15
%
 
704,937

 
3.81
%
  Home equity lines of credit
152,231

 
5.29
%
 
151,363

 
4.92
%
 
144,433

 
4.98
%
Total loans, net of unearned income (1)
4,110,605

 
4.32
%
 
4,222,340

 
4.07
%
 
3,725,976

 
3.98
%
Investment securities (1)
201,696

 
3.29
%
 
175,314

 
3.14
%
 
147,572

 
2.76
%
Other earning assets
141,748

 
1.34
%
 
147,405

 
1.47
%
 
273,505

 
1.16
%
Total interest-earning assets
4,454,049

 
4.18
%
 
4,545,059

 
3.95
%
 
4,147,053

 
3.75
%
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
39,508

 
 
 
36,117

 
 
 
41,590

 
 
Allowance for loan losses
(31,581
)
 
 
 
(31,174
)
 
 
 
(30,518
)
 
 
Premises and equipment, net
91,232

 
 
 
90,030

 
 
 
87,679

 
 
Other real estate
7,221

 
 
 
7,383

 
 
 
9,111

 
 
Other assets
242,360

 
 
 
243,119

 
 
 
224,730

 
 
Total noninterest-earning assets
348,740

 
 
 
345,475

 
 
 
332,592

 
 
Total assets
$
4,802,789

 
 
 
$
4,890,534

 
 
 
$
4,479,645

 
 
Liabilities and shareholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
$
463,292

 
0.13
%
 
$
489,051

 
0.14
%
 
$
447,348

 
0.12
%
Money market and savings deposits
1,415,868

 
0.70
%
 
1,349,447

 
0.61
%
 
1,341,189

 
0.49
%
Time deposits
918,668

 
1.30
%
 
906,133

 
1.16
%
 
1,021,563

 
0.92
%
Total interest-bearing deposits
2,797,828

 
0.80
%
 
2,744,631

 
0.70
%
 
2,810,100

 
0.59
%
Other short-term borrowings
169,128

 
1.92
%
 
395,215

 
1.84
%
 
20,899

 
0.32
%
Subordinated debt
120,667

 
5.43
%
 
120,637

 
5.43
%
 
120,538

 
5.04
%
Total interest-bearing liabilities
3,087,623

 
1.04
%
 
3,260,483

 
1.02
%
 
2,951,537

 
0.77
%
Noninterest-bearing liabilities and shareholders’ equity:
 
 
 
 
 
 
Demand deposits
1,244,640

 
 
 
1,172,298

 
 
 
1,103,414

 
 
Other liabilities
44,538

 
 
 
42,081

 
 
 
44,732

 
 
Shareholders’ equity
425,988

 
 
 
415,672

 
 
 
379,962

 
 
Total noninterest-bearing liabilities and shareholders’ equity
1,715,166

 
 
 
1,630,051

 
 
 
1,528,108

 
 
Total liabilities and shareholders’ equity
$
4,802,789

 
 
 
$
4,890,534

 
 
 
$
4,479,645

 
 
Net interest spread
 
 
3.14
%
 
 
 
2.93
%
 
 
 
2.98
%
Net interest margin
 
 
3.45
%
 
 
 
3.22
%
 
 
 
3.20
%
 
 
 
 
 
 
 
 
 
 
 
 
(1) Interest income includes the effect of taxable-equivalent adjustment using a 21% tax rate for the quarters ended September 30, 2018 and June 30, 2018 and a 35% tax rate for the quarter ended September 30, 2017.




15




FIDELITY SOUTHERN CORPORATION AND SUBSIDIARIES
GAAP TO NON-GAAP RATIO RECONCILIATION
(UNAUDITED)
 
For the Quarter Ended
($ in thousands)
September 30,
2018
 
June 30,
2018
 
March 31,
2018
 
December 31,
2017
 
September 30,
2017
 
 
 
 
 
 
 
 
 
 
Reconciliation of nonperforming assets to adjusted nonperforming assets:
Nonperforming assets (GAAP)
$
71,333

 
$
74,442

 
$
75,955

 
$
63,338

 
$
58,606

Less: repurchased government-guaranteed mortgage loans included on nonaccrual
(27,218
)
 
(27,220
)
 
(26,091
)
 
(19,478
)
 
(15,450
)
Less: SBA guaranteed loans included on nonaccrual
(4,049
)
 
(3,639
)
 
(1,541
)
 
(1,652
)
 
(2,145
)
Less: Nonaccrual acquired loans
(7,388
)
 
(7,648
)
 
(7,890
)
 
(6,242
)
 
(7,366
)
Adjusted nonperforming assets, excluding acquired loans and government-guaranteed loans (non-GAAP)
$
32,678

 
$
35,935

 
$
40,433

 
$
35,966

 
$
33,645

 
 
 
 
 
 
 
 
 
 
Reconciliation of total loans, ORE and repossessions to total loans, ORE and repossessions, less acquired loans:
Loans, excluding Loans Held-for-Sale
$
3,706,953

 
$
3,792,886

 
$
3,714,308

 
$
3,580,966

 
$
3,409,707

Add: ORE
8,031

 
6,834

 
7,668

 
7,621

 
8,624

Add: repossessions
1,271

 
1,303

 
1,853

 
2,392

 
2,040

Total loans, ORE, and repossessions (GAAP)
3,716,255

 
3,801,023

 
3,723,829

 
3,590,979

 
3,420,371

Less: acquired loans
(150,763
)
 
(165,303
)
 
(178,496
)
 
(196,567
)
 
(216,994
)
Adjusted loans, ORE, and repossessions, less acquired loans (non-GAAP)
$
3,565,492

 
$
3,635,720

 
$
3,545,333

 
$
3,394,412

 
$
3,203,377

Nonperforming assets to loans, ORE, and repossessions (GAAP)
1.92
%
 
1.96
%
 
2.04
%
 
1.76
%
 
1.71
%
Adjusted nonperforming assets to adjusted loans, ORE, and repossessions (non-GAAP)
0.92
%
 
0.99
%
 
1.14
%
 
1.06
%
 
1.05
%
Nonperforming assets to total assets (GAAP)
1.48
%
 
1.52
%
 
1.58
%
 
1.38
%
 
1.30
%
Adjusted nonperforming assets to total assets (non-GAAP)
0.68
%
 
0.73
%
 
0.84
%
 
0.79
%
 
0.75
%
 
 
 
 
 
 
 
 
 
 
Reconciliation of allowance to adjusted allowance:
 
 
 
 
 
 
 
 
 
Allowance for loan losses (GAAP)
$
31,157

 
$
31,623

 
$
30,940

 
$
29,772

 
$
30,703

Less: allowance allocated to indirect auto loans
(8,556
)
 
(9,210
)
 
(9,888
)
 
(10,258
)
 
(10,116
)
Less: allowance allocated to acquired loans
(134
)
 
(134
)
 
(134
)
 
(209
)
 
(159
)
Adjusted allowance for loan losses (non-GAAP)
$
22,467

 
$
22,279

 
$
20,918

 
$
19,305

 
$
20,428

 
 
 
 
 
 
 
 
 
 
Reconciliation of period end loans to adjusted period end loans:
Loans, excluding Loans Held-for-Sale
$
3,706,953

 
$
3,792,886

 
$
3,714,308

 
$
3,580,966

 
$
3,409,707

Less: indirect auto loans
(1,588,419
)
 
(1,698,879
)
 
(1,719,670
)
 
(1,716,156
)
 
(1,609,678
)
Less: acquired loans
(150,763
)
 
(165,303
)
 
(178,496
)
 
(196,567
)
 
(216,994
)
Adjusted total loans (non-GAAP)
$
1,967,771

 
$
1,928,704

 
$
1,816,142

 
$
1,668,243

 
$
1,583,035

Allowance to total loans (GAAP)
0.84
%
 
0.83
%
 
0.83
%
 
0.83
%
 
0.90
%
Adjusted allowance to adjusted total loans (non-GAAP)
1.14
%
 
1.16
%
 
1.15
%
 
1.16
%
 
1.29
%
 
 
 
 
 
 
 
 
 
 
Reconciliation of book value per common share to tangible book value per common share:
Shareholders' equity
$
432,098

 
$
420,962

 
$
410,744

 
$
401,632

 
$
388,068

Less: intangible assets
(11,474
)
 
(11,751
)
 
(12,028
)
 
(12,306
)
 
(12,625
)
Tangible shareholders' equity
$
420,624

 
$
409,211

 
$
398,716

 
$
389,326

 
$
375,443

End of period common shares outstanding
27,260,681

 
27,191,787

 
27,034,255

 
27,019,201

 
26,815,287

Book value per common share (GAAP)
$
15.85

 
$
15.48

 
$
15.19

 
$
14.86

 
$
14.47

Tangible book value per common share (non-GAAP)
15.43

 
15.05

 
14.75

 
14.41

 
14.00


16