Fidelity Southern Corp. New (LION, Financial) filed Quarterly Report for the period ended 2009-06-30.
Fidelity Southern Corporation through its operating subsidiary Fidelity Bank provides a wide range of banking mortgage and investment services through branches in Atlanta Georgia. Mortgage construction and automobile loans are also provided through offices in Jacksonville Florida. Fidelity Southern Corp. New has a market cap of $26.6 million; its shares were traded at around $2.71 with and P/S ratio of 0.3. The dividend yield of Fidelity Southern Corp. New stocks is 0.3%. Fidelity Southern Corp. New had an annual average earning growth of 14.6% over the past 5 years.
Income from mortgage banking activities increased $4.5 million and $8.1 million to $4.6 million and $8.3 million for the second quarter and first six months of 2009, respectively, compared to the same periods in 2008. In the first quarter of 2009, management made the strategic decision to expand the mortgage banking operation by hiring over 60 former employees of an Atlanta based mortgage company which closed down operations. As a result of this expansion and favorable mortgage interest rates, the Bank originated approximately $371 million and $456 million in mortgage loans during the second quarter and first six months of 2009, respectively, compared to $6.0 million and $11.6 million for the same periods in 2008. Origination fee income for the second quarter and first six months of 2009 was $2.3 million and $3.5 million, respectively, compared to $69,000 and $100,000 for the same periods in 2008. Gain on loans sold increased from $41,000 for the quarter ended June 30, 2008 to $2.7 million for the same quarter in 2009 and $70,000 to $3.5 million for the first six months of 2008 compared to 2009. In addition, on January 1, 2009 the Bank elected under SFAS No. 159 to value its loans held-for-sale at fair value. This valuation along with the mark to market on the derivatives associated with interest rate lock commitments and related hedges resulted in the recognition of a mark to market gain of $1.3 million during the first six months of 2009 (See Note 7).
Income from indirect lending activities, which includes both net gains from the sale of indirect automobile loans and servicing and ancillary loan fees on loans sold, decreased $459,000 and $901,000 in the second quarter and first six months of 2009, respectively, compared to the same periods in 2008. The decreases were a result of a reduction in gain on sales due to lower sales and lower indirect automobile loans serviced for others. With the continued liquidity and credit crisis, automobile sales have been down and the secondary markets continued to show little activity during 2009 though management did begin to see some signs of improvement in the second quarter of 2009. Through June 30, 2009, there were servicing retained sales of $27.8 million of indirect automobile loans, $13.1 million of which occurred in the second quarter. In 2008 there were servicing retained sales of $55.6 million during the first six months, $28.1 million in the second quarter, and a servicing released sale of $24.0 million in the first quarter of 2008. The average amount of loans serviced for others decreased from $278 million for the first six months of 2008 to $225 million for the same period in 2009, a decrease of $54 million or 19.4% due to monthly principal payments which exceeded the additional loans serviced for others added because of fewer servicing retained loan sales.
Noninterest expense was $17.5 million for the second quarter of 2009, compared to $12.5 million for the same period in 2008, an increase of $5.0 million. The increase was a result of higher salaries and benefits expense which increased $2.5 million as a result of the expansion of the mortgage division and the associated commission expense. ORE related expenses, which were $1.9 million in the second quarter of 2009, increased $849,000 compared to the same period in 2008. The increase was a result of higher foreclosed assets held by the Bank during 2009. The average ORE balance increased to $23.0 million for the second quarter of 2009 compared to $12.9 million for the same period in 2008. The ORE expense is made up of $1.5 million in provision for other real estate losses and $483,000 in maintenance, real estate taxes, and other related expenses. In addition, total FDIC insurance expense increased $1.3 million primarily related to a FDIC special assessment of five basis points on total assets as of June 30, 2009 and an increase in our regular assessment of $405,000.
Noninterest expense was $31.5 million for the first six months of 2009, compared to $23.8 million for the same period in 2008, an increase of $7.7 million. The increase was a result of higher salaries and benefits expense which increased $3.5 million as a result of the expansion of the mortgage division and the associated commission expense. ORE related expenses, which were $2.7 million for the first six months of 2009, increased $1.5 million compared to the same period in 2008. The increase was a result of higher foreclosed assets held by the Bank during 2009. The average ORE balance increased 99.2% to $20.7 million for the first six months of 2009 compared to $10.4 million for the same period in 2008. The ORE expense is made up of $2.0 million in provision for other real estate losses and $710,000 in maintenance, real estate taxes, and other related expenses.
Loans decreased $73.3 million or 5.3% to $1.315 billion at June 30, 2009 compared to $1.388 billion at December 31, 2008. The decrease in loans was primarily the result of a decrease in consumer installment loans of $97.6 million or 7.8% to $626.2 million, and a decrease in real estate construction loans of $89.3 million or 18.2% to $200.5 million. Until receiving the TARP Capital Purchase Program capital infusion in December of 2008, management actively engaged in reducing the level of the loan portfolio to preserve capital ratios. By slowing originations in the consumer installment portfolio, the normal monthly principal paydowns led to lower outstanding loans. As the liquidity and credit crisis continued during the first six months of 2009, demand for construction loans continued to be limited and the portfolio balance continued to decrease including $17.1 million in loans that were transferred to other real estate. Management expects the trend of decreasing construction loans to continue in 2009 due to continued payoffs and lack of demand for new residential construction while the consumer installment portfolio is expected to increase because of a recent expansion in loan origination personnel.
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Fidelity Southern Corporation through its operating subsidiary Fidelity Bank provides a wide range of banking mortgage and investment services through branches in Atlanta Georgia. Mortgage construction and automobile loans are also provided through offices in Jacksonville Florida. Fidelity Southern Corp. New has a market cap of $26.6 million; its shares were traded at around $2.71 with and P/S ratio of 0.3. The dividend yield of Fidelity Southern Corp. New stocks is 0.3%. Fidelity Southern Corp. New had an annual average earning growth of 14.6% over the past 5 years.
Highlight of Business Operations:
For the second quarter of 2009, the Company recorded a net loss of $2.8 million compared to net loss of $902,000 for the second quarter of 2008. Net loss available for common equity was $3.6 million for the quarter ended June 30, 2009. Per share losses (basic and diluted) for the second quarter of 2009 and 2008 were $.37 and $.09, respectively. Net (loss) income for the six months ended June 30, 2009 was $(6.2) million compared to $208,000 for the same period in 2008. Earnings (loss) per share (basic and diluted) for the first six months of 2009 and 2008 were $(.79) and $.02, respectively. The decrease in net income for the second quarter and first six months of 2009 when compared to the same periods in 2008 was primarily due to a $1.4 million and $6.4 million increase in the provision for loan losses to $7.2 million and $16.8 million, respectively. The increase in the provision for loan losses was due to increased nonperforming assets and loan charge-offs caused by the continued recession and slow housing market.Income from mortgage banking activities increased $4.5 million and $8.1 million to $4.6 million and $8.3 million for the second quarter and first six months of 2009, respectively, compared to the same periods in 2008. In the first quarter of 2009, management made the strategic decision to expand the mortgage banking operation by hiring over 60 former employees of an Atlanta based mortgage company which closed down operations. As a result of this expansion and favorable mortgage interest rates, the Bank originated approximately $371 million and $456 million in mortgage loans during the second quarter and first six months of 2009, respectively, compared to $6.0 million and $11.6 million for the same periods in 2008. Origination fee income for the second quarter and first six months of 2009 was $2.3 million and $3.5 million, respectively, compared to $69,000 and $100,000 for the same periods in 2008. Gain on loans sold increased from $41,000 for the quarter ended June 30, 2008 to $2.7 million for the same quarter in 2009 and $70,000 to $3.5 million for the first six months of 2008 compared to 2009. In addition, on January 1, 2009 the Bank elected under SFAS No. 159 to value its loans held-for-sale at fair value. This valuation along with the mark to market on the derivatives associated with interest rate lock commitments and related hedges resulted in the recognition of a mark to market gain of $1.3 million during the first six months of 2009 (See Note 7).
Income from indirect lending activities, which includes both net gains from the sale of indirect automobile loans and servicing and ancillary loan fees on loans sold, decreased $459,000 and $901,000 in the second quarter and first six months of 2009, respectively, compared to the same periods in 2008. The decreases were a result of a reduction in gain on sales due to lower sales and lower indirect automobile loans serviced for others. With the continued liquidity and credit crisis, automobile sales have been down and the secondary markets continued to show little activity during 2009 though management did begin to see some signs of improvement in the second quarter of 2009. Through June 30, 2009, there were servicing retained sales of $27.8 million of indirect automobile loans, $13.1 million of which occurred in the second quarter. In 2008 there were servicing retained sales of $55.6 million during the first six months, $28.1 million in the second quarter, and a servicing released sale of $24.0 million in the first quarter of 2008. The average amount of loans serviced for others decreased from $278 million for the first six months of 2008 to $225 million for the same period in 2009, a decrease of $54 million or 19.4% due to monthly principal payments which exceeded the additional loans serviced for others added because of fewer servicing retained loan sales.
Noninterest expense was $17.5 million for the second quarter of 2009, compared to $12.5 million for the same period in 2008, an increase of $5.0 million. The increase was a result of higher salaries and benefits expense which increased $2.5 million as a result of the expansion of the mortgage division and the associated commission expense. ORE related expenses, which were $1.9 million in the second quarter of 2009, increased $849,000 compared to the same period in 2008. The increase was a result of higher foreclosed assets held by the Bank during 2009. The average ORE balance increased to $23.0 million for the second quarter of 2009 compared to $12.9 million for the same period in 2008. The ORE expense is made up of $1.5 million in provision for other real estate losses and $483,000 in maintenance, real estate taxes, and other related expenses. In addition, total FDIC insurance expense increased $1.3 million primarily related to a FDIC special assessment of five basis points on total assets as of June 30, 2009 and an increase in our regular assessment of $405,000.
Noninterest expense was $31.5 million for the first six months of 2009, compared to $23.8 million for the same period in 2008, an increase of $7.7 million. The increase was a result of higher salaries and benefits expense which increased $3.5 million as a result of the expansion of the mortgage division and the associated commission expense. ORE related expenses, which were $2.7 million for the first six months of 2009, increased $1.5 million compared to the same period in 2008. The increase was a result of higher foreclosed assets held by the Bank during 2009. The average ORE balance increased 99.2% to $20.7 million for the first six months of 2009 compared to $10.4 million for the same period in 2008. The ORE expense is made up of $2.0 million in provision for other real estate losses and $710,000 in maintenance, real estate taxes, and other related expenses.
Loans decreased $73.3 million or 5.3% to $1.315 billion at June 30, 2009 compared to $1.388 billion at December 31, 2008. The decrease in loans was primarily the result of a decrease in consumer installment loans of $97.6 million or 7.8% to $626.2 million, and a decrease in real estate construction loans of $89.3 million or 18.2% to $200.5 million. Until receiving the TARP Capital Purchase Program capital infusion in December of 2008, management actively engaged in reducing the level of the loan portfolio to preserve capital ratios. By slowing originations in the consumer installment portfolio, the normal monthly principal paydowns led to lower outstanding loans. As the liquidity and credit crisis continued during the first six months of 2009, demand for construction loans continued to be limited and the portfolio balance continued to decrease including $17.1 million in loans that were transferred to other real estate. Management expects the trend of decreasing construction loans to continue in 2009 due to continued payoffs and lack of demand for new residential construction while the consumer installment portfolio is expected to increase because of a recent expansion in loan origination personnel.
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