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Fidelity Southern Corporation Reports Record Earnings of $4.9 Million for Second Quarter and Improved Asset Quality

ATLANTA, July 15 /PRNewswire-FirstCall/ -- Fidelity Southern Corporation ("Fidelity" or the "Company") (Nasdaq: LION), holding company for Fidelity Bank (the "Bank"), reported net income of $4.9 million for the second quarter of 2010 compared to a net loss of $2.8 million for the second quarter of 2009.  After accounting for the TARP preferred dividend, basic and diluted income per share for the second quarter of 2010 was $.39 and $.35, respectively, compared to a basic and diluted loss per share of $.36 in the second quarter of 2009.  Net income for the first six months of 2010 was $5.1 million compared to net loss of $6.2 million for the same period in 2009.  Basic and diluted income per share for the first six months of 2010 was $.33 and $.29, respectively, compared to basic and diluted loss per share of $.78 for the same period in 2009.



For the quarter ended



6/30/2010


3/31/2010


12/31/2009


9/30/2009


6/30/2009














(In Thousands)












Net Income (Loss)


$   4,869


$     195


$  1,928


$    398


$ (2,805)












Income Tax Expense (Benefit)


2,647


(93)


920


(346)


(2,095)

Provision For Loan Losses


1,150


3,975


7,500


4,500


7,200

Write-down of ORE


1,615


1,367


731


1,159


1,456

Other cost of ORE Operations


743


802


1,299


981


483

Pre-Tax, Pre-Credit Related Earnings


11,024


6,246


12,378


6,692


4,239

Less Security Gains


(2,291)



(4,789)


(519)


Core Operating Earnings (1)


$    8,733


$  6,246


$  7,589


$ 6,173


$  4,239













(1)  The calculation of core operating earnings is a non-GAAP measure.




We show core operating earnings which remove income taxes, provision for loan losses, cost of operation of ORE, and security gains because we believe that helps show a view of more normalized net revenues.  The measure allows better comparability with prior periods, as well as with peers in the industry who also provide a similar presentation.

"The strength of our underlying core bank continues the steady improvement which became visible in the second quarter of last year," said H. Palmer Proctor, Jr., President.  "This reflects our deliberate decisions in 2007 to identify problem credits and deal with them consequentially.  Additionally, we began a targeted expansion program in 2008 which has resulted in the hiring of 151 experienced, local bankers for our Commercial, Residential Mortgage, SBA, and Indirect Automobile departments.  These teams have contributed to our recent financial success and we are very much committed to continue building momentum and prudently adding staff where appropriate.  Lastly, for the past three years, we have been aggressively promoting the Fidelity Bank brand through increased advertising and will continue to make such investments in the future as we successfully increase our market share."

"We believe that we are well equipped to manage through this difficult economic environment and its effects on our customers," said James B. Miller, Jr. Chairman.  "There are obvious crosscurrents but this economy is showing signs of improvement."

"Our lending and deposit gathering successes have come by taking market share.  We plan now to expand with de novo branching and, when appropriate, to look at assisted transactions and traditional acquisitions."

ASSET QUALITY

Net charge-offs were $3.5 million in the second quarter of 2010 compared to $6.0 million in the second quarter of 2009 and were at the lowest level since the second quarter of 2008.  Year to date, net charge-offs decreased $5.7 million for the first six months of 2010 to $8.1 million compared to $13.8 million for the same period in 2009.  For the 2.5 year period ended June 30, 2010, net charge-offs were $59.9 million and the Company recorded an aggregate provision for loan losses of $70.5 million.  For every dollar of net charge-offs realized, the Company recorded $1.18 in provision.  The ratio of net charge-offs to average loans outstanding was .91% for the six months ended June 30, 2010, compared to 2.08% for the same period in 2009.  Fidelity reported an allowance for loan losses of $27.1 million or 2.07% of total loans at June 30, 2010, compared to $30.1 million or 2.33% at December 31, 2009, and $36.7 million or 2.79% of total loans at June 30, 2009.  The decrease was a result of improving nonaccrual loans and nonperforming assets trends.

Nonperforming loans, repossessions and other real estate ("ORE") totaled $82.1 million at the end of the second quarter of 2010, a decrease of $10.8 million from December 31, 2009, and a decrease of $36.0 million from June 30, 2009.




6/30/2010


3/31/2010


12/31/2009


9/30/2009


6/30/2009













(In Millions)













Nonperforming assets, includes SBA guaranteed loans



$      82.1



$       88.4



$       92.9  



$     106.3



$     118.1




Nonperforming residential construction and development loans at June 30, 2010, included 102 houses and 333 lots and land totaling approximately $43.6 million.  During the second quarter, approximately $2.9 million of nonperforming construction loans were paid down by our customers while approximately $5.6 million in construction loans were moved to nonperforming.

During the second quarter of 2010, $5.5 million of ORE assets were sold while $3.1 million were added to ORE.  ORE consists of 51 houses, representing 28% of the total ORE balance, 350 lots and four commercial properties.  ORE increased $445,000 to $22.2 million at June 30, 2010, compared to $21.8 million at December 31, 2009.  ORE was $25.0 million at June 30, 2009.  

Nonperforming and foreclosed SBA loans, including the SBA guaranteed amounts of $6.1 million and $3.5 million at June 30, 2010, and 2009, respectively, totaled $14.8 million at the end of the second quarter of 2010 and $9.5 million at the end of the second quarter of 2009.

As a result of improved asset quality, the provision for loan losses for the second quarter of 2010 was $1.2 million compared to $7.2 million for the same period in 2009.  The provision for loan losses for the first six months of 2010 was $5.1 million compared to $16.8 million for the same period in 2009.  

DEPOSITS

Total deposits at June 30, 2010 of $1.564 billion reflect the improvement in the deposit mix brought about by the implementation of the Bank's deposit strategy to increase our core deposits.  The Bank continued to aggressively market its non-certificate of deposit products in 2010.  As a result, demand, money market and savings accounts increased $94.6 million or 11.1% at June 30, 2010, compared to December 31, 2009.  The reduction in the interest rate paid on deposit accounts during the period demonstrates the Company's commitment to improved net interest margin.




June 30,

2010


December 31,

2009


June 30,

2009


$


%


$


%


$


%














(Dollars in Millions)













Core deposits(1)

$1,244.8


79.6%


$1,194.3


77.0%


$1,117.5


71.4%













Time Deposits > $100,000

211.6


13.5


257.4


16.6


319.5


20.4













Brokered deposits

107.2


6.9


99.0


6.4


128.9


8.2













Total deposits

$1,563.6


100.0%


$1,550.7


100.0%


$1,565.9


100.0%













Quarterly rate on deposits

1.62%


2.01%


2.75%














(1) Core deposits are transactional, savings, and time deposits under $100,000.  




REAL ESTATE

New residential construction loan advances made during the quarter totaled $8 million, while the payoffs of performing construction loans totaled $23 million.  Residential construction and A&D loans totaled $127 million at June 30, 2010, which was down 35% from $193.7 million at June 30, 2009.  There were 312 houses and 1,414 lots financed at June 30, 2010 compared to 466 houses and 1,765 lots at June 30, 2009.

Total residential and commercial construction and land loans decreased to $128.7 million or 9.8% of loans at June 30, 2010, from $154.8 million or 12.0% of loans at December 31, 2009, and $200.5 million or 15.3% of loans at June 30, 2009, and as a percentage of capital was 63% at June 30, 2010.  The regulatory guideline is a maximum of 100%.

All real estate loans, excluding owner-occupied properties, as a percentage of capital was 137% at June 30, 2010.  The regulatory guideline is a maximum of 300%.  

CAPITAL

Fidelity reported a total risk based capital ratio for the Bank of 13.57% at June 30, 2010, compared to 12.49% at June 30, 2009.  The Leverage Capital ratio at the Bank was 9.57% at June 30, 2010, compared to 8.77% at June 30, 2009.  Both ratios exceeded required regulatory minimums for well-capitalized institutions.  At June 30, 2010, the total risk based capital ratio and the leverage ratio increased six basis points and 26 basis points, respectively, from March 31, 2010.

NET INTEREST MARGIN

Net interest margin increased 95 basis points to 3.67% in the second quarter of 2010 compared to 2.72% in the second quarter of 2009, and increased 27 basis points from 3.40% for the first quarter of 2010.  Somewhat offsetting the increase in margin was a decrease in average total interest earning assets of $8.6 million or .5% for the quarter ended June 30, 2010, compared to the same quarter in 2009.  Net interest income for the second quarter of 2010 increased $4.2 million or 34.8% when compared to the same period in 2009.  The increase in net interest income for the quarter is a result of a greater reduction in the cost of funds than the decrease in the yield on earning assets.  

The net interest margin increased 84 basis points to 3.54% in the first half of 2010 compared to 2.70% for the same period in 2009.  In addition, average total interest earning assets increased $27.2 million or 1.6% for the six months ended June 30, 2010, compared to the same period in 2009.  The increases are a result of a greater reduction in the cost of funds than the decrease in the yield on earning assets.  Net interest income for the first six months of 2010 increased $7.8 million or 33.7% over the same period in 2009.  

INTEREST INCOME

Total interest income for the second quarter of 2010 decreased $266,000 or 1.1% compared to the same period in 2009.  The yield on average interest-earning assets decreased 4 basis points and average interest-earning assets for the second quarter 2010 decreased $8.6 million or .5%.  However, approximately $32 million of Indirect and SBA loans were produced and sold during the second quarter of 2010.  Mortgage loans of $212 million were also sold during this period.  The decrease in yield was primarily the result of a decrease in the yield on investment securities of 77 basis points and a decrease in the yield on interest bearing deposits of 13 basis points.  These decreases were somewhat offset by an 11 basis point increase in the yield on loans to 6.06%.  

Total interest income year to date through June 30, 2010 decreased $366,000 or .8% compared to the same period in 2009.  The decrease in interest income in 2010 was the result of a decrease of 13 basis points in the yield on average interest-earning assets offset in part by the growth in average interest-earning assets in 2010, which increased $27.2 million or 1.6%.  The decrease in yield was a result of a 70 basis point decrease in yield on investment securities which was somewhat offset by an increase in the yield on total loans of 14 basis points.

INTEREST EXPENSE

Interest expense for the second quarter of 2010 decreased $4.5 million or 35.2% compared to the same period in 2009.  The decrease in interest expense was attributable to a 107 basis point decrease in the cost of interest-bearing liabilities and a decrease in average interest-bearing liabilities of $37.4 million or 2.3%.  In addition to the general decrease in deposit rates, the Bank's shift in deposit mix toward core demand and savings accounts contributed to the reduction in the cost of funds.  During the second quarter of 2010, management continued to allow high cost time deposits to mature and be replaced by lower cost core deposits.  While brokered deposits decreased $21.7 million compared to June 30, 2009, management locked in historically low interest rates on longer term brokered deposits during 2010 increasing the total outstanding by $8.2 million compared to December 31, 2009.  At June 30, 2010, brokered deposits represented only 6.9% of total deposits.  

Year to date in 2010, interest expense decreased $8.1 million or 32.5% compared to the same period in 2009.  The decrease in interest expense was attributable to a 108 basis point decrease in the cost of interest-bearing liabilities somewhat offset by an increase in average interest-bearing liabilities of $17.1 million.

NONINTEREST INCOME

Noninterest income increased $3.5 million or 45.0% to $11.2 million for the quarter ended June 30, 2010, compared to the same period in 2009.  The increase in noninterest income was primarily the result of a $2.3 million increase in securities gains as management repositioned the investment portfolio as part of the interest rate, cash flow, and capital risk rating strategies.  In addition, other operating income increased $619,000 due to higher net gains on the sales of other real estate and SBA lending activities increased $475,000 as the Bank was able to recognize gains on sales of SBA loans which had been deferred from the first quarter of 2010 in accordance with new accounting requirements effective in 2010.

Noninterest income increased $3.2 million or 21.9% to $17.8 million for the year to date ended June 30, 2010 compared to the same period in 2009.  The increase was primarily the result of the securities gains of $2.3 million as discussed above.  Other operating income increased $752,000 due primarily to higher net gains on the sales of other real estate.  In addition, income from SBA lending activities increased $409,000 due to higher gains on sale as premiums increased with improved liquidity in the secondary market and the new accounting requirement discussed above.  Partially offsetting these increases was a decrease in income on mortgage banking activities which decreased $457,000 or 5.5% to $7.8 million due to lower origination volume.

NONINTEREST EXPENSE

Noninterest expense for the second quarter of 2010 increased $1.3 million or 7.5% to $18.8 million compared to the same period in 2009.  The increase was due to higher salaries and employee benefits which increased $1.1 million or 12.0% to $10.0 million as the Bank increased the number of employees as a result of the expansion of the mortgage division and an increase in lenders in the SBA, Commercial, Private Banking and Indirect Auto Lending divisions.  Other operating expense increased $629,000 or 39.7% to $2.2 million due to higher underwriting, insurance and advertising expenses.  The cost of operation of other real estate increased $418,000 or 21.6% to $2.4 million due primarily to higher foreclosure expenses and write-downs related to ORE.  These increases were partially offset by lower FDIC insurance premiums which decreased $675,000 or 43.4% due to the one time special assessment in the second quarter of 2009.

Noninterest expense for the first six months of 2010 increased $4.3 million or 13.6% to $35.8 million compared to the same period in 2009.  The increase was a result of higher salaries, commissions and employee benefits which increased $2.1 million or 12.3% to $18.9 million, the cost of operation of other real estate which increased $1.8 million or 68.4% to $4.5 million due primarily to higher write-downs related to ORE and higher foreclosure expenses, and higher operating expense, which increased $569,000 or 16.3% to $4.1 million due primarily to higher underwriting and insurance expense.

Fidelity Southern Corporation, through its operating subsidiaries Fidelity Bank and LionMark Insurance Company, provides banking services and credit related insurance products through 23 branches in Atlanta, Georgia, a branch in Jacksonville, Florida, and an insurance office in Atlanta, Georgia.  SBA, Indirect Automobile, and mortgage loans are provided through employees located throughout the Southeast.  For additional information about Fidelity's products and services, please visit the website at www.FidelitySouthern.com.

This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment.  These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements.  Any such statements are based on current expectations and involve a number of risks and uncertainties.  For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled "Forward Looking Statements" on page 3 of Fidelity Southern Corporation's 2009 Annual Report filed on Form 10-K with the Securities and Exchange Commission.

FIDELITY SOUTHERN CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)












QUARTER TO DATE


YEAR TO DATE

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

JUNE 30,


JUNE 30,



2010


2009


2010


2009










INTEREST INCOME








  LOANS, INCLUDING FEES

$      21,754


$      21,693


$      42,818


$      42,904

  INVESTMENT SECURITIES

2,673


2,981


4,748


5,072

  FEDERAL FUNDS SOLD AND BANK DEPOSITS

13


32


106


62

     TOTAL INTEREST INCOME

24,440


24,706


47,672


48,038










INTEREST EXPENSE








 DEPOSITS

6,349


10,685


13,225


21,170

 SHORT-TERM BORROWINGS

381


188


713


378

 SUBORDINATED DEBT

1,123


1,181


2,240


2,384

 OTHER LONG-TERM DEBT

346


603


689


1,062

     TOTAL INTEREST EXPENSE

8,199


12,657


16,867


24,994










NET INTEREST INCOME

16,241


12,049


30,805


23,044










PROVISION FOR LOAN LOSSES

1,150


7,200


5,125


16,800










NET INTEREST INCOME AFTER








 PROVISION FOR LOAN LOSSES

15,091


4,849


25,680


6,244










NONINTEREST INCOME








 SERVICE CHARGES ON DEPOSIT ACCOUNTS

1,171


1,103


2,219


2,126

 OTHER FEES AND CHARGES

559


506


1,043


977

 MORTGAGE BANKING ACTIVITIES

4,525


4,649


7,800


8,257

 INDIRECT LENDING ACTIVITIES

1,161


1,051


2,197


2,195

 SBA LENDING ACTIVITIES

734


259


846


437

 SECURITIES GAINS

2,291


-


2,291


-

 BANK OWNED LIFE INSURANCE

330


329


656


627

 OTHER OPERATING INCOME

477


(142)


703


(49)

   TOTAL NONINTEREST INCOME

11,248


7,755


17,755


14,570










NONINTEREST EXPENSE








 SALARIES AND EMPLOYEE BENEFITS

10,021


8,950


18,905


16,842

 FURNITURE AND EQUIPMENT

674


691


1,318


1,346

 NET OCCUPANCY

1,125


1,103


2,215


2,182

 COMMUNICATION EXPENSES

475


415


919


765

 PROFESSIONAL AND OTHER SERVICES

1,074


1,263


2,112


2,336

 COST OF OPERATION OF OTHER REAL ESTATE

2,358


1,940


4,527


2,689

 FDIC INSURANCE EXPENSE

881


1,556


1,767


1,879

 OTHER OPERATING EXPENSES

2,215


1,586


4,054


3,485

   TOTAL NONINTEREST EXPENSE

18,823


17,504


35,817


31,524










INCOME (LOSS) BEFORE INCOME TAX (BENEFIT) EXPENSE

7,516


(4,900)


7,618


(10,710)

INCOME TAX EXPENSE (BENEFIT)

2,647


(2,095)


2,554


(4,529)










NET INCOME (LOSS)

4,869


(2,805)


5,064


(6,181)

PREFERRED STOCK DIVIDENDS

(823)


(823)


(1,646)


(1,646)

NET INCOME (LOSS) AVAILABLE TO COMMON EQUITY

$        4,046


$      (3,628)


$        3,418


$      (7,827)










INCOME (LOSS) PER SHARE:









   BASIC INCOME (LOSS) PER SHARE

$          0.39


$        (0.36)


$          0.33


$        (0.78)


   DILUTED INCOME (LOSS) PER SHARE

$          0.35


$        (0.36)


$          0.29


$        (0.78)










WEIGHTED AVERAGE COMMON









SHARES OUTSTANDING-BASIC

10,616,533


10,106,205


10,461,335


10,050,450










WEIGHTED AVERAGE COMMON









SHARES OUTSTANDING-FULLY DILUTED

12,076,624


10,106,205


11,718,941


10,050,450



FIDELITY SOUTHERN CORPORATION

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)









(DOLLARS IN THOUSANDS)

JUNE 30,


DECEMBER 31,


JUNE 30,


ASSETS

2010


2009


2009









CASH AND DUE FROM  BANKS

$    110,658


$       170,692


$      54,531


FEDERAL FUNDS SOLD

519


428


11,351


   CASH AND CASH EQUIVALENTS

111,177


171,120


65,882


INVESTMENTS AVAILABLE-FOR-SALE

164,082


136,917


236,648


INVESTMENTS HELD-TO-MATURITY

16,896


19,326


21,989


INVESTMENT IN FHLB STOCK

6,857


6,767


6,767


LOANS HELD-FOR-SALE

183,672


131,231


169,126


LOANS

1,308,991


1,289,859


1,314,678


ALLOWANCE FOR LOAN LOSSES

(27,104)


(30,072)


(36,663)


LOANS, NET

1,281,887


1,259,787


1,278,015


PREMISES AND EQUIPMENT, NET

18,795


18,092


18,688


OTHER REAL ESTATE

22,225


21,780


25,025


ACCRUED INTEREST RECEIVABLE

7,992


7,832


8,379


BANK OWNED LIFE INSURANCE

29,663


29,058


28,448


OTHER ASSETS

41,355


49,610


35,941









         TOTAL ASSETS

$ 1,884,601


$    1,851,520


$ 1,894,908
















LIABILITIES










DEPOSITS:







   NONINTEREST-BEARING DEMAND

$    172,919


$       157,511


$    129,621


   INTEREST-BEARING DEMAND/







      MONEY MARKET

336,983


252,493


253,381


   SAVINGS

435,267


440,596


319,785


   TIME DEPOSITS, $100,000 AND OVER

211,550


257,450


319,481


   OTHER TIME DEPOSITS  

406,902


442,675


543,674


        TOTAL DEPOSIT LIABILITIES

1,563,621


1,550,725


1,565,942
















SHORT-TERM BORROWINGS

49,902


41,870


42,763


SUBORDINATED DEBT

67,527


67,527


67,527


OTHER LONG-TERM DEBT

50,000


50,000


75,000


ACCRUED INTEREST PAYABLE

3,708


4,504


5,892


OTHER LIABILITIES

12,700


7,209


8,084


         TOTAL LIABILITIES

1,747,458


1,721,835


1,765,208









SHAREHOLDERS' EQUITY














PREFERRED STOCK

45,137


44,696


44,255


COMMON STOCK

56,091


53,342


52,560


ACCUMULATED OTHER COMPREHENSIVE







    INCOME (LOSS)

1,261


(64)


1,264


RETAINED EARNINGS

34,654


31,711


31,621


         TOTAL SHAREHOLDERS' EQUITY

137,143


129,685


129,700









         TOTAL LIABILITIES AND SHARE-







                  HOLDERS' EQUITY

$ 1,884,601


$    1,851,520


$ 1,894,908









BOOK VALUE PER SHARE

$          8.68


$             8.40


$          8.47


SHARES OF COMMON STOCK OUTSTANDING

10,599,293


10,116,693


10,086,570










FIDELITY SOUTHERN CORPORATION

LOANS, BY CATEGORY

(UNAUDITED)












(DOLLARS IN THOUSANDS)







PERCENT CHANGE




JUNE 30,


DECEMBER 31,


JUNE 30,


Jun 30, 2010/

Jun 30, 2010/



2010


2009


2009


Dec. 31, 2009

Jun 30, 2009

























COMMERCIAL, FINANCIAL AND AGRICULTURAL

$    100,748


$       113,604


$    125,903


(11.32)

%

(19.98)

%

TAX-EXEMPT COMMERCIAL

5,251


5,350


7,115


(1.85)

%

(26.20)

%

REAL ESTATE MORTGAGE - COMMERCIAL

329,996


287,354


233,360


14.84

%

41.41

%

     TOTAL COMMERCIAL

435,995


406,308


366,378


7.31

%

19.00

%

REAL ESTATE-CONSTRUCTION

128,735


154,785


200,543


(16.83)

%

(35.81)

%

REAL ESTATE-MORTGAGE

129,177


130,984


121,516


(1.38)

%

6.30

%

CONSUMER INSTALLMENT

615,084


597,782


626,241


2.89

%

(1.78)

%


LOANS

1,308,991


1,289,859


1,314,678


1.48

%

(0.43)

%

LOANS HELD-FOR-SALE:












ORIGINATED RESIDENTIAL MORTGAGE LOANS

134,962


80,869


125,811


66.89

%

7.27

%


SBA LOANS

18,710


20,362


28,315


(8.11)

%

(33.92)

%


INDIRECT AUTO LOANS

30,000


30,000


15,000


0.00

%

100.00

%


    TOTAL LOANS HELD-FOR-SALE

183,672


131,231


169,126


39.96

%

8.60

%


         TOTAL LOANS

$ 1,492,663


$    1,421,090


$ 1,483,804








FIDELITY SOUTHERN CORPORATION

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

(UNAUDITED)










YEAR TO DATE


YEAR ENDED




JUNE 30,


DECEMBER 31,

(DOLLARS IN THOUSANDS)

2010


2009


2009









BALANCE AT BEGINNING OF PERIOD

$ 30,072


$   33,691


$         33,691

CHARGE-OFFS:







COMMERCIAL, FINANCIAL AND AGRICULTURAL

79


301


315


SBA

140


519


730


REAL ESTATE-CONSTRUCTION

4,331


6,651


20,217


REAL ESTATE-MORTGAGE

129


190


416


CONSUMER INSTALLMENT

3,895


6,600


11,622



TOTAL CHARGE-OFFS

8,574


14,261


33,300

RECOVERIES:







COMMERCIAL, FINANCIAL AND AGRICULTURAL

2


8


9


SBA

-


5


31


REAL ESTATE-CONSTRUCTION

108


22


76


REAL ESTATE-MORTGAGE

1


-


20


CONSUMER INSTALLMENT

370


398


745



TOTAL RECOVERIES

481


433


881

NET CHARGE-OFFS

8,093


13,828


32,419

PROVISION FOR LOAN LOSSES

5,125


16,800


28,800

BALANCE AT END OF PERIOD

$ 27,104


$   36,663


$         30,072

















RATIO OF NET CHARGE-OFFS DURING PERIOD TO AVERAGE








LOANS OUTSTANDING, NET

0.91%


2.08%


2.44%

ALLOWANCE FOR LOAN LOSSES AS A PERCENTAGE OF LOANS

2.07%


2.79%


2.33%

















NONPERFORMING ASSETS

(UNAUDITED)












JUNE 30,


DECEMBER 31,

(DOLLARS IN THOUSANDS)

2010


2009


2009









NONACCRUAL LOANS

$ 58,588


$   91,605


$         69,743

REPOSSESSIONS

1,304


1,509


1,393

OTHER REAL ESTATE

22,225


25,025


21,780



TOTAL NONPERFORMING ASSETS ***

$ 82,117


$ 118,139


$         92,916

*** INCLUDES SBA GUARANTEED AMOUNTS OF APPROXIMATELY

$   6,100


$     3,500


$           4,500

LOANS PAST DUE 90 DAYS OR MORE AND STILL ACCRUING

$           -


$             -


$                   -









RATIO OF LOANS PAST DUE 90 DAYS OR MORE AND






  STILL ACCRUING TO TOTAL LOANS

-%


-%


-%









RATIO OF NONPERFORMING ASSETS TO TOTAL LOANS,








OREO AND REPOSSESSIONS

5.42%


7.82%


6.43%



DELINQUENCIES

(UNAUDITED)

(IN THOUSANDS)















Dec-08


Mar-09


Jun-09


Sep-09


Dec-09


Mar-10


Jun-10

PAST DUE (30-59)

$ 23,890


$ 13,719


$   5,678


$   8,242


$ 11,905


$ 19,171


$ 7,618

PAST DUE (60-89)

6,706


2,080


7,841


2,059


6,505


658


1,289

PAST DUE (90+)

-


-


-


-


-


563


-

    TOTAL PAST DUE

$ 30,596


$ 15,799


$ 13,519


$ 10,301


$ 18,410


$ 20,392


$ 8,907















INDIRECT

$ 10,584


$   4,978


$   4,313


$   6,579


$   7,912


$   4,551


$ 3,958

CONSTRUCTION

9,980


4,977


6,606


-


292


12,282


-

COMMERCIAL

6,831


2,061


-


-


5,295


946


-

SBA

1,492


1,549


-


1,605


3,238


740


2,911

OTHER

1,709


2,234


2,600


2,117


1,673


1,873


2,038

    TOTAL PAST DUE

$ 30,596


$ 15,799


$ 13,519


$ 10,301


$ 18,410


$ 20,392


$ 8,907



FIDELITY SOUTHERN CORPORATION

AVERAGE BALANCE, INTEREST AND YIELDS

(UNAUDITED)










YEAR TO DATE


June 30, 2010


June 30, 2009


Average

Income/

Yield/


Average

Income/

Yield/

(dollars in thousands)

Balance

Expense

Rate


Balance

Expense

Rate

Assets








Interest-earning assets :








Loans, net of unearned income








 Taxable

$ 1,413,338

$ 42,713

6.09%


$ 1,449,013

$ 42,770

5.95%

 Tax-exempt (1)

5,294

160

6.14%


7,304

202

5.63%

    Total loans

1,418,632

42,873

6.09%


1,456,317

42,972

5.95%









Investment securities








 Taxable

243,971

4,504

3.69%


216,292

4,752

4.40%

 Tax-exempt (2)

11,706

365

6.21%


15,554

469

6.03%

    Total investment securities

255,677

4,869

3.82%


231,846

5,221

4.52%









Interest-bearing deposits

92,295

106

0.23%


35,866

45

0.25%

Federal funds sold

603

-

0.08%


15,951

17

0.21%

    Total interest-earning assets

1,767,207

47,848

5.46%


1,739,980

48,255

5.59%









Cash and due from banks

6,580




21,187



Allowance for loan losses

(28,940)




(33,706)



Premises and equipment, net

18,523




19,018



Other real estate

24,912




20,678



Other assets

78,385




64,614



    Total assets

$ 1,866,667




$ 1,831,771



















Liabilities and shareholders' equity








Interest-bearing liabilities :








Demand deposits

$    274,007

$   1,232

0.91%


$    223,007

$   1,444

1.31%

Savings deposits

448,381

3,500

1.57%


258,595

3,238

2.53%

Time deposits

673,241

8,493

2.54%


887,646

16,488

3.75%

    Total interest-bearing deposits

1,395,629

13,225

1.91%


1,369,248

21,170

3.12%









Federal funds purchased

1,492

7

0.94%


-

-

0.00%

Securities sold under agreements to








 repurchase

21,773

177

1.64%


42,207

346

1.65%

Other short-term borrowings

27,155

529

3.93%


2,541

32

2.58%

Subordinated debt

67,527

2,240

6.69%


67,527

2,384

7.12%

Long-term debt

50,000

689

2.78%


64,917

1,062

3.30%

    Total interest-bearing liabilities

1,563,576

16,867

2.18%


1,546,440

24,994

3.26%









Noninterest-bearing :








Demand deposits

158,745




136,888



Other liabilities

13,138




13,976



Shareholders' equity

131,208




134,467



 Total liabilities and








    shareholders' equity

$ 1,866,667




$ 1,831,771











Net interest income / spread


$ 30,981

3.28%



$ 23,261

2.33%

Net interest margin



3.54%




2.70%









(1)  Interest income includes the effect of taxable-equivalent  adjustment for 2010 and 2009 of $55,000 and $68,000 respectively.

(2)  Interest income includes the effect of taxable-equivalent adjustment for 2010 and 2009 of $121,000 and $149,000, respectively.



FIDELITY SOUTHERN CORPORATION

AVERAGE BALANCE, INTEREST AND YIELDS

(UNAUDITED)










QUARTER ENDED


June 30, 2010


June 30, 2009


Average

Income/

Yield/


Average

Income/

Yield/

(dollars in thousands)

Balance

Expense

Rate


Balance

Expense

Rate

Assets








Interest-earning assets :








Loans, net of unearned income








 Taxable

$ 1,436,360

$ 21,701

6.06%


$ 1,456,086

$ 21,627

5.96%

 Tax-exempt (1)

5,269

80

6.14%


7,175

100

5.65%

    Total loans

1,441,629

21,781

6.06%


1,463,261

21,727

5.95%









Investment securities








 Taxable

289,034

2,551

3.53%


262,656

2,817

4.29%

 Tax-exempt (2)

11,706

182

6.22%


15,889

240

6.06%

    Total investment securities

300,740

2,733

3.64%


278,545

3,057

4.41%









Interest-bearing deposits

42,148

13

0.13%


40,749

26

0.26%

Federal funds sold

604

-

0.09%


11,163

6

0.20%

    Total interest-earning assets

1,785,121

24,527

5.51%


1,793,718

24,816

5.55%









Cash and due from banks

2,249




22,115



Allowance for loan losses

(28,537)




(34,743)



Premises and equipment, net

18,845




18,896



Other real estate

25,297




23,029



Other assets

77,042




64,586



    Total assets

$ 1,880,017




$ 1,887,601



















Liabilities and shareholders' equity








Interest-bearing liabilities :








Demand deposits

$    288,301

$      673

0.94%


$    240,716

$      837

1.39%

Savings deposits

454,791

1,708

1.51%


292,252

1,830

2.51%

Time deposits

655,751

3,968

2.43%


886,791

8,018

3.63%

    Total interest-bearing deposits

1,398,843

6,349

1.82%


1,419,759

10,685

3.02%









Federal funds purchased

2,967

7

0.94%


-

-

0.00%

Securities sold under agreements to








 repurchase

23,149

115

1.99%


41,823

170

1.63%

Other short-term borrowings

26,813

259

3.88%


2,582

18

2.69%

Subordinated debt

67,527

1,123

6.67%


67,527

1,181

7.01%

Long-term debt

50,000

346

2.78%


75,055

603

3.22%

    Total interest-bearing liabilities

1,569,299

8,199

2.09%


1,606,746

12,657

3.16%









Noninterest-bearing :








Demand deposits

164,001




132,574



Other liabilities

14,266




14,499



Shareholders' equity

132,451




133,782



 Total liabilities and








    shareholders' equity

$ 1,880,017




$ 1,887,601











Net interest income / spread


$ 16,328

3.42%



$ 12,159

2.39%

Net interest margin



3.67%




2.72%









(1)  Interest income includes the effect of taxable-equivalent adjustment for 2009 and 2008 of $27,000 and $34,000 respectively.

(2)  Interest income includes the effect of taxable-equivalent adjustment for 2009 and 2008 of $60,000 and $76,000.



Contacts:

Martha Fleming, Steve Brolly


Fidelity Southern Corporation (404) 240-1504



SOURCE Fidelity Southern Corporation

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